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Networking Shines in HP's Gloomy Final Earnings

Mitch Wagner
11/25/2015
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In its final earnings report as a unified company, Hewlett-Packard on Tuesday reported net revenue of $103.4 billion in fiscal 2015, down 7% year-over-year. But networking was a bright spot, with net revenue of $2.8 billion, up 8% year-over-year.

Bright Spot
Networking revenues are up in the face of overall declining revenues. (Image source: HP.)
Networking revenues are up in the face of overall declining revenues. (Image source: HP.)

Non-GAAP diluted earnings per share were $3.59, down 4% year-over-year.

HP split into two companies effective November 1, and the earnings call reflected that split, with executives from both companies speaking out. (See HP Reports 2015 Revenue $103.4B Down 7% Year-Over-Year.)

Beginning with the next earnings call in three months, the two companies will report separately. Hewlett Packard Enterprise includes the IT, cloud and networking business, while HP Inc. (NYSE: HPQ) takes over the parent's personal computer and printer business.


Find out more about key developments related to the systems and technologies deployed in data centers on Light Reading's data center infrastructure channel


Demand from service providers -- particularly hypercloud providers -- helped drive growth in sales of industry standard servers, which were $13.4 billion, up 7% year-over-year. HP expects cloud builders of all sizes to drive future growth. (See Dell-EMC-VMware Merger Could Push Comms to Kids' Table.)

Meg Whitman, CEO of Hewlett Packard Enterprise, said her company has reached a strategic agreement with Microsoft Corp. (Nasdaq: MSFT), to make Microsoft Azure HP's preferred public cloud provider, while HPE will be the preferred provider of Microsoft infrastructure and services for hybrid clouds. The companies will provide further details next week.

In October, HP announced it will "double-down on our private and managed cloud capabilities and sunset our public cloud offering," Whitman noted Tuesday.

HPE sees hybrid cloud as a significant growth opportunity, she said.

Whitman took a moment on the call to take a shot at competitors EMC and Dell and their planned merger. Those companies are looking to get bigger and "doubling down on legacy technology," while HP is getting leaner and "leaning in to new technology," she said. (See Dell Buys EMC for $67B in Biggest Tech Deal Ever.)

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— Mitch Wagner, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profileFollow me on Facebook, West Coast Bureau Chief, Light Reading. Got a tip about SDN or NFV? Send it to [email protected]

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nasimson
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nasimson,
User Rank: Light Sabre
12/14/2015 | 9:11:21 AM
Re: A bit unwise
A printer is a slightly younger but still too-old cousin of TypeWriter. It eats up your desk space and gathers dust.
Mitch Wagner
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Mitch Wagner,
User Rank: Lightning
12/7/2015 | 6:49:12 PM
Re: A bit unwise
A "printer" is a thing you need to use twice a year, when you absolutely can't get around doing so, and when you need it it turns out to be jammed or out of toner. 
Steve Saunders
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Steve Saunders,
User Rank: Blogger
11/25/2015 | 8:12:48 PM
Re: A bit unwise
I'm guessing it was a straightforward reaction to Mike Dell saying he wanted to be the biggest enterprise networking company in the world Just shows how insular the enterprise market is They could have called it HP Cloud and had a name for the ages But, they didn't Better than Hewlett Studebaker Packard jalopies and printer networks I guess
Steve Saunders
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Steve Saunders,
User Rank: Blogger
11/25/2015 | 8:08:30 PM
Re: A bit unwise
What is a "printer"?
DHagar
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DHagar,
User Rank: Light Sabre
11/25/2015 | 7:32:24 PM
Re: A bit unwise
MitchWagner, I think HP, Inc. drew the short straw.   Maybe they will pull out the play book from Kodak!

I thing the HP Enterprise will do well - your numbers show the opportunity for them. 

Note:  I like your characterization as "CEO Trash Talking" - that's a good one.
Mitch Wagner
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Mitch Wagner,
User Rank: Lightning
11/25/2015 | 5:21:17 PM
Re: A bit unwise
They did not explain the rebranding, which was done some time ago. 

Good point about the enterprise being the customer. 

Related: I'd hate to be the CEO of HP Inc. Printers and PCs. Probably gaslamps and buggy whips too. 
Steve Saunders
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Steve Saunders,
User Rank: Blogger
11/25/2015 | 10:32:07 AM
Re: A bit unwise
I don't understand the name change.

Why "Enterprise"? 

Strikes me as tone deaf to the market which is actually driving their growth - service providers. 

SPs and CSPs don't self identify as "enterprises" ever.

Chalk and chsees. To a service provider the enterprise is their customer.  

Did they explain the rebranding at all, Mitch? 
Mitch Wagner
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Mitch Wagner,
User Rank: Lightning
11/25/2015 | 10:06:40 AM
Re: A bit unwise
nasimon - Agreed, but this is fine as CEO trash-talk. 
nasimson
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nasimson,
User Rank: Light Sabre
11/25/2015 | 8:55:14 AM
A bit unwise
I think it's a bit unwise to dismiss EMC+DELL as doubling down on old technology. EMC has quite a few tricks up it's sleeve which can upset HP and others.
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